Notice2024-01437
Submission for OMB Review; Comment Request; Extension: Rule 18f-3
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 25, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 17 (Thursday, January 25, 2024)</title>
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[Federal Register Volume 89, Number 17 (Thursday, January 25, 2024)]
[Notices]
[Pages 5033-5034]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-01437]
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SECURITIES AND EXCHANGE COMMISSION
[SEC File No. 270-385, OMB Control No. 3235-0441]
Submission for OMB Review; Comment Request; Extension: Rule 18f-3
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.) (``Paperwork Reduction Act''), the
Securities and Exchange Commission (``the Commission'') has submitted
to the Office of Management and Budget (``OMB'') a request for
extension of the previously approved collection of information
discussed below.
Rule 18f-3 (17 CFR 270.18f-3) under the Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) exempts from section 18(f)(1) and 18
(f)(i) a fund that issues multiple classes of shares representing
interests in the same portfolio of securities (a ``multiple class
fund'') if the fund satisfies the conditions of the rule. In general,
each class must differ in its arrangement for shareholder services or
distribution or both, must pay the related expenses of that different
arrangement, and must satisfy certain voting rights provisions. The
rule includes one requirement for the collection of information. A
multiple class fund must prepare, and fund directors must approve, a
written plan setting forth the separate arrangement and expense
allocation of each class, and any related conversion features or
exchange privileges (``rule 18f-3 plan''). Approval of the plan must
occur before the fund issues any shares of multiple classes and
whenever the fund materially amends the plan. In approving the plan,
the fund board, including a majority of the independent directors, must
determine that the plan is in the best interests of each class and the
fund as a whole.
The requirement that the fund prepare and directors approve a
written rule 18f-3 plan is intended to ensure that the fund compiles
information relevant to the fairness of the separate arrangement and
expense allocation for each class, and that directors review and
approve the information. Without a blueprint that highlights material
differences among classes, directors might not perceive potential
conflicts of interests when they determine whether the plan is in the
best interests of each class and the fund. In addition, the plan may be
useful to Commission staff in reviewing the fund's compliance with the
rule.
The following estimates of average burden hours are made solely for
purposes of the Paperwork Reduction Act of 1995 \1\ and are not derived
from a comprehensive or even representative survey or study of the cost
of Commission rules and forms. Compliance with the information
collection requirements of rule 18f-3 is necessary to obtain the
benefit of the rule's exemption. The collection of information under
rule 18f-3 is mandatory. Responses to the collection of information
requirements will not be kept confidential.
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\1\ 44 U.S.C. 3501 et seq.
Table 1--Rule 18f-3 PRA Estimates
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Internal annual burden Wage rate \1\ Internal time costs
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ESTIMATES FOR RULE 18F-3
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Prepare and approve a written 18f-3 6 hours \3\.................
plan \2\.
Average number of responses 0.5 responses \3\...........
annually per registrant.
Total number of hours per 3 hours \3\................. $484 (in-house $936,056 (in-house
registrant per year \4\. attorney). $4,770 attorney).
(fund board of $4,612,590 (board of
directors) \6\ directors) \7\.
Total number of registrants........ 967 \4\.....................
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Total annual hour burden....... 2,901 hours \5\............. ...................... $5,548,646 \8\.
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Notes:
1. The Commission's estimates of the relevant wage rates are based on salary information for the securities
industry compiled by the Securities Industry and Financial Markets Association's Office Salaries in the
Securities Industry 2013; the estimated figures are modified by firm size, employee benefits, overhead, and
adjusted to account for the effects of inflation; see Securities Industry and Financial Markets Association,
Report on Management & Professional Earnings in the Securities Industry 2013.
2. The Commission estimates that each registrant prepares and approves a rule 18f-3 plan every two years when
issuing a new fund or class or amending a plan (or that 484 of all 967 registrants prepare and approve a plan
each year).
3. This estimate assumes that each response will take 6 hours, requiring 3 hours per registrant per year (0.5
responses per registrant x 6 hours per response = 3 hours per registrant).
4. The Commission estimates that there are approximately 6,733 multiple class funds offered by 967 registrants.
5. 967 registrants x 3 hours = 2,901 hours.
6. The estimate for the cost of board time is derived from estimates made by the staff regarding typical board
size and compensation that is based on information received from fund representatives and publicly available
sources; the $4,770 per hour estimate for a fund board of directors was last adjusted for inflation through
2019,and assumes an average of 9 board members per board.
[[Page 5034]]
7. This estimate assumes that two-thirds (1,934) of the internal hours are spent by in-house attorneys to
prepare the plan (1,934 hours x $484 estimated hourly rate = $936,056 per year) and that one-third (967) are
spent by the fund's board of directors to approve the plan (967 hours x $4,770 per hour = $4,612,590).
8. $936,056 + $4,612,590 = $5,548,646.
The information provided under rule 18f-3 will not be kept
confidential. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a currently valid OMB control number.
The public may view background documentation for this information
collection at the following website: <a href="http://www.reginfo.gov">www.reginfo.gov</a>. Find this
particular information collection by selecting ``Currently under 30-day
Review--Open for Public Comments'' or by using the search function.
Written comments and recommendations for the proposed information
collection should be sent within 30 days of publication of this notice
by February 26, 2024 to (i) <a href="/cdn-cgi/l/email-protection#c18c8399ef8e8c83ef8e889380ef9284829ea5a4b2aa9eaea7a7a8a2a4b381aeaca3efa4aeb1efa6aeb7"><span class="__cf_email__" data-cfemail="733e312b5d3c3e315d3c3a21325d2036302c171600182c1c15151a101601331c1e115d161c035d141c05">[email protected]</span></a>
and (ii) David Bottom, Director/Chief Information Officer, Securities
and Exchange Commission, c/o John Pezzullo, 100 F Street NE,
Washington, DC 20549, or by sending an email to: <a href="/cdn-cgi/l/email-protection#26767467796b474f4a44495e6655434508414950"><span class="__cf_email__" data-cfemail="cf9f9d8e9082aea6a3ada0b78fbcaaace1a8a0b9">[email protected]</span></a>.
Dated: January 22, 2024.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-01437 Filed 1-24-24; 8:45 am]
BILLING CODE 8011-01-P
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